Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

Property Condition Disclosure Law: Why Did States Mandate 'Seller Tell All'?

Thirty-six US states have already enacted some form of seller's property condition disclosure law. At a time when there is a movement in this direction nationally, this paper attempts to ascertain the factors that lead states to adopt disclosure law. Motivation for the study stems from the fact that not all states have yet adopted the law, and states that have enacted the law have done so in different years. The analytical structure employs hazard models, using a unique set of economic and institutional attributes for a panel of 50 US States spanning 21 years, from 1984 to 2004. The proportional hazard analysis of law adoption reveals that greater number of disciplinary actions tends to favor passage of the law. Greater broker supervision, implying generally higher awareness among real estate agents, seems to have a negative impact on the likelihood of a state adopting a property condition disclosure law.

Property Condition Disclosure Law: Does 'Seller Tell All' Matter in Property Values?

At the time when at least two-thirds of the US states have already mandated some form of seller's property condition disclosure statement and there is a movement in this direction nationally, this paper examines the impact of seller's property condition disclosure law on the residential real estate values, the information asymmetry in housing transactions and shift of risk from buyers and brokers to the sellers, and attempts to ascertain the factors that lead to adoption of the disclosur law. The analytical structure employs parametric panel data models, semi-parametric propensity score matching models, and an event study framework using a unique set of economic and institutional attributes for a quarterly panel of 291 US Metropolitan Statistical Areas (MSAs) and 50 US States spanning 21 years from 1984 to 2004. Exploiting the MSA level variation in house prices, the study finds that the average seller may be able to fetch a higher price (about three to four percent) for the house if she furnishes a state-mandated seller's property condition disclosure statement to the buyer.

Na 50 Nachlass Arthur Schopenhauer - 'Schopenhauer-Archiv', 114 - Bericht über seinen Aufenthalt in Willing

Text in französischer Sprache;

La prosa de Enrique Vila-Matas entre best-seller y literatura intelectual : Aproximaciones extratextuales a través del 'campo literario' barcelonés

A través de ciertos aspectos formales y mediante un gran número de conexiones intertextuales la prosa de Enrique Vila-Matas se sitúa dentro de la tradición literaria, observación que, junto con el gran prestigio que le atribuye la crítica y con numerosos premios literarios, parece confirmar su pertenencia a una literatura exigente, concebida artísticamente. Aunque así no cumpla con el supuesto que la literatura best-seller sacrifica pretensiones artísticas o intelectuales para atraer al mayor número de compradores posible, las obras del autor catalán se encuentran, sin embargo, entre los libros españoles contemporáneos más leídos, lo mismo en España y en América Latina. Buscando una explicación a ese fenómeno, nos acercaremos a su obra explorando el 'campo literario' que la rodea, el ámbito editorial y el mercado del libro. Nuestra pregunta es: ¿Cuáles son las circunstancias extraliterarias que hay que tener en cuenta en este caso? Esperamos llegar a partir del análisis del fenómeno Vila-Matas a conclusiones más generales sobre las relaciones entre las calidades literarias de un texto y ciertos factores extratextuales que abrirán paso a perspectivas nuevas respecto a la producción literaria en la época de los medios de masas

La prosa de Enrique Vila-Matas entre best-seller y literatura intelectual : Aproximaciones extratextuales a través del 'campo literario' barcelonés

A través de ciertos aspectos formales y mediante un gran número de conexiones intertextuales la prosa de Enrique Vila-Matas se sitúa dentro de la tradición literaria, observación que, junto con el gran prestigio que le atribuye la crítica y con numerosos premios literarios, parece confirmar su pertenencia a una literatura exigente, concebida artísticamente. Aunque así no cumpla con el supuesto que la literatura best-seller sacrifica pretensiones artísticas o intelectuales para atraer al mayor número de compradores posible, las obras del autor catalán se encuentran, sin embargo, entre los libros españoles contemporáneos más leídos, lo mismo en España y en América Latina. Buscando una explicación a ese fenómeno, nos acercaremos a su obra explorando el 'campo literario' que la rodea, el ámbito editorial y el mercado del libro. Nuestra pregunta es: ¿Cuáles son las circunstancias extraliterarias que hay que tener en cuenta en este caso? Esperamos llegar a partir del análisis del fenómeno Vila-Matas a conclusiones más generales sobre las relaciones entre las calidades literarias de un texto y ciertos factores extratextuales que abrirán paso a perspectivas nuevas respecto a la producción literaria en la época de los medios de masas

La prosa de Enrique Vila-Matas entre best-seller y literatura intelectual : Aproximaciones extratextuales a través del 'campo literario' barcelonés

A través de ciertos aspectos formales y mediante un gran número de conexiones intertextuales la prosa de Enrique Vila-Matas se sitúa dentro de la tradición literaria, observación que, junto con el gran prestigio que le atribuye la crítica y con numerosos premios literarios, parece confirmar su pertenencia a una literatura exigente, concebida artísticamente. Aunque así no cumpla con el supuesto que la literatura best-seller sacrifica pretensiones artísticas o intelectuales para atraer al mayor número de compradores posible, las obras del autor catalán se encuentran, sin embargo, entre los libros españoles contemporáneos más leídos, lo mismo en España y en América Latina. Buscando una explicación a ese fenómeno, nos acercaremos a su obra explorando el 'campo literario' que la rodea, el ámbito editorial y el mercado del libro. Nuestra pregunta es: ¿Cuáles son las circunstancias extraliterarias que hay que tener en cuenta en este caso? Esperamos llegar a partir del análisis del fenómeno Vila-Matas a conclusiones más generales sobre las relaciones entre las calidades literarias de un texto y ciertos factores extratextuales que abrirán paso a perspectivas nuevas respecto a la producción literaria en la época de los medios de masas

Trust and Reputation in Internet Auctions

Exchange between anonymous actors in Internet auctions corresponds to a one-shot prisoner's dilemma-like situation. Therefore, in any given auction the risk is high that seller and buyer will cheat and, as a consequence, that the market will collapse. However, mutual cooperation can be attained by the simple and very efficient institution of a public rating system. By this system, sellers have incentives to invest in reputation in order to enhance future chances of business. Using data from about 200 auctions of mobile phones we empirically explore the effects of the reputation system. In general, the analysis of nonobtrusive data from auctions may help to gain a deeper understanding of basic social processes of exchange, reputation, trust, and cooperation, and of the impact of institutions on the efficiency of markets. In this study we report empirical estimates of effects of reputation on characteristics of transactions such as the probability of a successful deal, the mode of payment, and the selling price (highest bid). In particular, we try to answer the question whether sellers receive a "premium" for reputation. Our results show that buyers are willing to pay higher prices for reputation in order to diminish the risk of exploitation. On the other hand, sellers protect themselves from cheating buyers by the choice of an appropriate payment mode. Therefore, despite the risk of mutual opportunistic behavior, simple institutional settings lead to cooperation, relatively rare events of fraud, and efficient markets.

Glittering gems for willing workers /

Mode of access: Internet.

Home buyer's and seller's guide to radon /

"6609-J."

Highway safety program standards: are we willing to accept change?.

Mode of access: Internet.

Certain inducements to well minded people who are here straitned in their estates or otherwise; or, such as are willing, out of noble and publike principles, to transport themselves or some servants, or agents for them into the West Indies, for the propagating of the gospel and increase of trade ...

"No. 20, edition 250 copies, of which 50 are on large paper."

Willing's press guide.

Vol. for 1949-1950 is a combined issue.

Gideon Drexel's millions : or, A willing fool /

Illustrated cover in colors.